Demand in China forecast to increase sharply, gold prices are steadily increasing

Metals Focus said that sales of gold jewelry in China are still very positive during the 1-week National Day holiday. In addition, the picture of business results in the third quarter is also bright thanks to the consumption of gold jewelry increasing by 32%, unchanged over the same period.

The growth in the manufacturing industry increased by 30%, down slightly compared to the same period due to lower export orders as well as the power outage policy (some jewelry manufacturers had to reduce operating hours due to lack of electricity).

Sprough demand has recorded gold prices on the Shanghai exchange continuing to trade at higher levels than those on the London exchange. Shipments of gold bullion to China have also been more dense in recent months," Metals Focus noted.

In addition, the report shows that the increased demand for gold for weddings also contributes to this progressive business outcome.

In the future, Metals Focus believes that positive factors are likely to be maintained. However, problems with electricity supply and measures to limit the spread of COVID-19 in the winter may slow down the growth rate of jewelry sales in the coming weeks.

The company still expects gold demand in China to increase by more than 40% this year, slightly lower than the 2019 revenue. The next increase is expected in 2022.

Regarding silver demand, Metals Focus said that in recent months, there have been some challenges in the use of silver in many industrial applications, from consumer electronics to the ph ph ph Electrical industry. However, the silver industry still has a lot of room for growth. Sales in 2021 are still on track to surpass the all-time high in 2019.

More importantly, the consulting firm emphasized that negative factors in the short term will have little impact on silver demand in the medium and long term.

Specifically, before the COP26 conference, the Chinese government has planned a path towards emission and carbon middlelining. This includes revising the plan to expand solar power capacity, as well as promoting vehicle electrification in the coming years.

In another development, the number of smartphones shipped in the third quarter decreased slightly. This is largely due to the construction of 5G stations across the country in an effort to switch to high-speed 5G networks. China is aiming to achieve 5G coverage across urban and rural areas by the end of 2025. The demand for silver could also be "advantaged".